I got a piece of great advice from an old colleague about sales management. He told me that it’s kind of like baseball. You put together a good team then build a history of stats to get a better idea of situation success. Many companies’ idea of sales training is focused exclusively on “making the nut” and chasing the order. But recently I’ve been reading about the “gap” between the perception and reality of sales team performance, noting that the “gap outcome” is usually unpleasant shortfalls at year end. My take on all this became the APR Method.
APR — the acronym stands for: Activity – Progress – Revenue. Look at them alone and in combination to establish numerical relationships or ratios and get a clearer picture of what needs to be done at key sales cycle phases to achieve a sales target In effect, the sales person using this method becomes his or her own business entity with a set of simple management tools to track performance during the selling year and establish minimums of performance that result in more consistent close rates.
It is not some foolproof sales strategy that guarantees success. And some of the current sales force automation systems can create a similar picture. But even the best baseball players, with great batting averages and on-base percentages, still get called out more than they hit. Because each phase is inter-related, the secret to the APR Method is in reviewing the ratio between A-P-R to improve that sales “batting average” all along the sales cycle.
These are the countable sales cycle tasks at the front end of a sales cycle that can affect later success:
- Numbers of phone calls – (no live person or just voice-mail left)
- Numbers of phone conversations – (with suspect)
- Numbers of requests for pricing and/or more basic information
- Numbers of in-person visits or follow up calls
The sales team leader and each member now look objectively at how much up-front work they are doing. It also provides opportunities for sales people to ask for assistance earlier in the selling year.
This is where a “suspect” becomes a “prospect” because your conversations with them have “progressed” and where order value comes into play:
- Numbers of conversations with a decision maker: can sign a buy order!
- Numbers of proposals in play
- Total value of all proposals
- Numbers of follow-up meetings/conference calls to discuss proposals
- Committed close dates by proposal
These measures are perhaps the most important in gauging the reliability of a pipeline report. They can help avoid those double digit percentage forecast errors that cripple a business, and bring into question a sales person’s knowledge of his customers and territory.
Here we’re talking about bookable orders and lost opportunities in terms of:
- Number and dollar value of all net new business
- Number and dollar value of repeat business
- Discounting applied to orders
- Lost Order Report – the amount and orders lost against our forecast
A key tenet of this method is realizing that Revenue is important but really more of an outcome than a measure, and serves as an end point for discussing additional work in the Activity and Progress areas to ensure adequate Revenue production.
Building a Sales Stat Book
Though the raw numbers in each category tell a certain story, it is the ratios between certain categories that reveal opportunities to enhance sales success. It also builds sales cycle history, and avenues to objectively discuss performance and adjustments in tactics well before the year-end. It can even close that “gap” between assumed sales efficacy and actual performance, allowing for effective changes in sales management tactics. So use the Method, build your sales stat book – And “Play Ball”!
Written by John Gouskos, BDS Affiliate and Senior Consultant, Sales & Marketing